"IOW, Libby was LYING TO RUSSERT in their conversation about Plame."
You're missing the point. Libby is not being indicted for lying to a reporter. He's being indicted for lying to a grand jury and giving false statements to the FBI. Russert says the conversation with Libby never took place so obviously someone is lying. What the Feds are saying is that because what Libby claims he told Russert is demonstrably false, then that's an indication that it's Libby who is lying and Russert who is telling the truth.
OK, so Russert is saying that the entire conversion about Plame never happened, that Libby just made it up. The question becomes WHY would Libby, a lawyer, testify to such a thing?